BANKS will be able to trade in foreign currencies on the free-platform being offered by Clearing Corporation of India Ltd (CCIL) from August 7.

CCIL has received permission from the Reserve Bank to launch it trading platform  FX-CLEAR. The platform will be available to all 73 members of CCIL's forex clearing system free of cost from August 7.

"Our intention is not so much to give competition to other terminal providers like Reuters and IBS Forex, but to make the facility available to even smaller banks. Till now majority of the authorised dealers in India did not have access to an automatic `order matching system', since they could not afford it. We expect all authorised dealers to start using this transparent dealing system," said Dr R.H. Patil, Chairman, CCIL.

"We will be providing straight through processing which will improve the efficiency of the forex market altogether," he added.

The mock trading on the platform  which covers the inter-bank US dollar-INE spot, swap transactions and those in major cross currencies such as Euro/$, $/Yen, £/$ etc.  has been going on since November 2002 among the 39 of the 73 members who have chosen to trade on FX-CLEAR.

At present, only about 20 banks have an `order matching system' in addition to a `negotiation mode' since it comes at a steep price of $2,000 per month from companies such as Reuters and IBS Forex. CCIL's new offering will give all authorised dealers access to an automatic foreign exchange order matching system at no additional cost.

An order matching system is similar to the NSE/BSE trading system, which is anonymous and offers transparency in price.